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Electronic messages to employers

HMRC has issued an electronic warning message to employers who have not submitted the number of returns expected during the January tax month.
The message is intended to be a helpful reminder to employers in case they have forgotten to make their PAYE submission on time. They are not penalty notices.
Employers receiving this message should check that they have sent all the submissions that are due for their PAYE scheme.
If employers have notified HMRC recently that their business has ceased, then they can ignore the electronic message and do not need to contact HMRC.
HMRC started to issue these messages in December 2013. There is more information in the ‘What’s New’ message from 10 December 2013 which also sets out instances where an employer may receive a non-filing message although they have filed on time:
A new electronic message to help employers keep up to date with their PAYE

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Genuine HMRC contacts

HM Revenue & Customs (HMRC) is always looking for ways of improving communication with customers and this means we may occasionally contact you in new ways.
We appreciate that you need to be able to confirm that any electronic contact you receive from us is genuine and to help you do this a list is provided below of the emails and texts (Secure Message Service (SMS)) that HMRC sends out.
HMRC will never send notifications of a tax rebate, or ask you to disclose personal or payment information by email. If you have any doubt that an email you receive from HMRC is genuine please do not follow any links, disclose any personal details or respond to it. Please forward it to HMRC atphishing@hmrc.gsi.gov.uk then delete it.

Current messages

Employer email alerts

HMRC sends informational emails several times a year to employers who have registered to receive them. These emails never ask you to provide personal or financial information.
The latest batch of emails issued by HMRC will be sent from 17 February. The emails are titled ‘Important information for employers’ providing useful information for employers. The emails include links which direct recipients to pages on the HMRC website atwww.hmrc.gov.uk/security/index.htm.
Please be aware, there is a fraudulent version of the Employer Bulletin in circulation which contains a zip file. Customers are strongly advised not to open the zip file attachment as this contains a virus. The genuine version of the Employer Bulletin does not contain a zip file.
Details of this scam and other examples can be found on thePhishing examples page.

Tax credits

HMRC will be sending text messages (SMS messages) to some customers to acknowledge receipt of their claim for tax credits. The messages will be sent for a short period starting 5 February.
The SMS message will not ask you to provide any personal or financial information.

PAYE Notices and Reminders

HMRC recommends you set up email reminders and notifications using one of the options available in PAYE Online. This means you’ll automatically get sent an email when there’s something new for you to view.
We also have commenced issuing electronic generic notification messages if you don’t send your payroll submissions on time, or you’re late making payments to HMRC. The notices contain messages to help you put processes in place so that you can pay and file on time – before new in-year penalties start in April 2014. Please see the following link with more information.
Using HMRC’s Online Service – PAYE for employers

Educational emails

HMRC will periodically send emails to customers to support their business life events.
The emails will include links to relevant online digital education material used to offer you help in relation to your business and will appear in your address bar as no-reply@hmrc.gov.uk.
These emails will never ask you to provide personal or financial information.

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Second estimate of the VAT gap for 2012-13: Official Statistics Release

The VAT gap estimate for 2012-13 relies on National Statistics produced by Office for National Statistics and also on the publication of revised forecasts for the UK economy by the Office for Budget Responsibility. Therefore, the second VAT gap estimate for 2012-13 will be published on the same day as Budget 19 March 2014.

February 2014

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Changes to the Registered Dealers in Controlled Oils Scheme (RDCO)

From 01 February 2014 Notice 192 has been updated to reflect changes to the approval process and the obligations of the RDCO (duty of care).

The RDCO scheme provides advice and guidance to anyone who handles, sells or deals in controlled oils. Controlled oils are defined as:

  • marked rebated gas oil (red diesel) including ultra low sulpur gas oil
  • marked rebated kerosene (paraffin, burning oil, etc), and
  • aviation kerosene (Avtur)

The approval process is an important part of HMRC’s control of the RDCO scheme and we have improved the process by introducing a fit and proper test, and a requirement to submit a business plan at the time of application, section 4 of notice of N192 provides further details.

Changes have also been made to the RDCO’s obligations. Section 5 of N192 provides further details.

In addition, other changes have been made to the notice to improve its readability these include changes to section 8 to clarify the position on the sanctions for non compliance with the scheme.

You can find more information by following the links below:

Revenue and Customs Brief 07/14

HMRC Notice 192: Registered Dealers in Controlled Oil Scheme

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International agreements to improve tax compliance

The Foreign Account Tax Compliance Act (FATCA), which is part of the US Hiring Incentives to Restore Employment Act of 2010, aims to combat tax evasion by US tax residents using foreign accounts. It includes certain provisions on withholding taxes and requires financial institutions outside the US to pass information about their US customers to the US tax authorities, the Internal Revenue Services (IRS). Failure to meet these new reporting obligations would result in a 30% withholding tax on the financial institutions.
Draft US regulations setting out the implementation details were published in February 2012.
The FATCA provisions impose new and substantial burdens on UK businesses in identifying US taxpayers, and registering and reporting information to the IRS. Significantly for UK institutions the Data Protection Act precludes UK businesses from passing the required information to the US.

The UK-US Agreement

The government (along with France, Germany, Italy, and Spain) and with the support of the European Commission took part in joint discussions with the US government to explore an intergovernmental approach to FATCA, supporting the overall aim to combat tax evasion, while reducing risks and burdens on financial institutions. A model intergovernmental agreement (IGA) was developed and published in July 2012.
The UK and the US subsequently signed an IGA – the ‘UK-US Agreement to Improve International Tax Compliance and to Implement FATCA’ – in September 2012 (see the ‘Current documents’ section below).
The IGA reduces some of the administrative burden of complying with the US regulations, and provides a mechanism for UK financial institutions to comply with their obligations without breaching the data protection laws. Under the IGA, financial institutions pass information to HM Revenue & Customs (HMRC) who will then automatically exchange this information with the IRS.
The IGA has changed since it was signed, in that Annex II has been updated by a mutual agreement entered into between the competent authorities of the UK and the US. The changes result in a wider scope of institutions and products effectively exempt from the FATCA requirements, and provide greater clarity on the categories of institutions which will be non-reporting UK financial institutions that are treated as deemed-compliant under the IGA.
Annex II of the IGA was amended by an Exchange of Notes between the two governments dated 3 June and 7 June 2013 (see the ‘Current documents’ section below).
On 12 July 2013 the US announced a delay of 6 months before the commencement of FATCA. The effect of this delay is that there will be no reporting with regard to 2013, and all current deadlines for undertaking due diligence etc will be pushed back by 6 months.
Download the US announcement on the IRS website (Opens new window)

Current documents

Final regulations laid on 7 August 2013 (Opens new window)
These regulations come into force on 1 September 2013.
Guidance published on 14 August 2013 (PDF 468K)
This version of the guidance supersedes any versions previously published.
UK-US Agreement to Improve International Tax Compliance and to Implement FATCA on the National Archives website (Opens new window)
Annex II to the UK-US Agreement on the Official Documents website (Opens new window).
Tax Information and Impact Note (PDF 47K)

Previously published documents

You can find further detailed information from the links below.
Consultation: Implementing the UK-US FATCA Agreement
Summary of Responses: Implementing the UK-US FATCA Agreement
Draft regulations on the implementation of the UK-US FATCA Agreement (PDF 1.5MB)
Draft guidance (PDF 281K)
Regulations published on 31 May 2013 (PDF 2.2MB)
Guidance published on 31 May 2013 (PDF 470K)

Other UK Agreements

The government has stated that it will look to sign further Agreements with other jurisdictions as part of their commitment to combat tax evasion. The Crown Dependencies (Isle of Man, Guernsey and Jersey) and the British Overseas Territories (the Cayman Islands, the British Virgin Islands, Bermuda, Anguilla, Turks and Caicos Islands, Montserrat and Gibraltar) have all agreed to enter into automatic tax information exchange agreements with the UK.
All the Crown Dependencies have entered into automatic tax information exchange agreements with the UK.
The UK and the Isle of Man signed an IGA – the ‘UK-Isle of Man Agreement to Improve International Tax Compliance’ – on 10 October 2013. This was the first agreement of this type to be signed and published where neither party was the USA.
Guernsey and Jersey signed IGAs with the UK on 22 October 2013 – the ‘UK-Guernsey Agreement to Improve International Tax Compliance’ and the ‘UK-Jersey Agreement to Improve International Tax Compliance’.
The British Overseas Territory of Gibraltar signed an IGA with the UK on 21 November 2013 – the ‘UK-Gibraltar Agreement to Improve International Tax Compliance’.
These 4 agreements are reciprocal, meaning that UK Financial Institutions will have to provide data on financial accounts held by residents of these territories. The UK will be bringing in regulations to implement these arrangements in 2014, these regulations were published in draft on the 12 December 2013 along with a draft Tax Information and Impact Note, and are open for consultation until the 24 January 2014.
Selected areas of draft guidance have already been published to give clarity on key differences in scope between the regulations for reporting on US account holders, and account holders from the Isle of Man, Guernsey, Jersey or Gibraltar. Further guidance relating to issues specific to these Agreements will be published shortly.
UK-Isle of Man Agreement to Improve International Tax Compliance (PDF 202K)
UK-Guernsey Agreement to Improve International Tax Compliance (PDF 207K)
UK-Jersey Agreement to Improve International Tax Compliance (PDF 211K)
UK-Gibraltar Agreement to Improve International Tax Compliance (PDF 207K)
Selected Draft Guidance for UK-CD/OT Agreements (PDF 45K)
Draft regulations on the implementation of the UK-CD and Gibraltar Agreements (PDF 133K)
Draft Tax Information and Impact Note (PDF 53K)
On 5 November the UK and the Cayman Islands signed the first IGA between the UK and an Overseas Territory – the ‘UK-Cayman Agreement to Improve International Tax Compliance’. Bermuda, Montserrat, the Turks and Caicos Islands and the British Virgin Islands all signed IGAs with the UK in London during the week of the Joint Ministerial Council (w/c 25 November) with Anguilla signing theirs on the 20 December.
The agreements with these territories are non-reciprocal, meaning that UK financial institutions will not have any reporting obligations under the terms of the agreements.
UK-Cayman Agreement to Improve International Tax Compliance (PDF 165K)
UK-Bermuda Agreement to Implement International Tax Compliance (PDF 189K)
UK-Montserrat Agreement to Implement International Tax Compliance (PDF 184K)
UK-Turks and Caicos Agreement to Implement International Tax Compliance (PDF 186K)
UK-British Virgin Islands Agreement to Implement International Tax Compliance (PDF 187K)
UK-Anguilla Agreement to Improve International Tax Compliance (PDF 200K)

Model UK-CD/OT Agreement

On the 26 June 2013 the government published a discussion document containing a model Agreement for the automatic exchange of information to improve international tax compliance that the UK is currently negotiating with the Crown Dependencies (CDs) and Overseas Territories (OTs). The Agreement contained a model inter-governmental agreement between the UK and an ‘IGA Counterparty’ for reciprocal exchange of information. The discussion is on the implementation by the UK of those agreements to be entered into.
Following the announcement by the US of a delay of 6 months before the commencement of US FATCA on the 12 July 2013 the UK government has announced that this revised timeline will also apply to similar agreements signed with the CDs and OTs.
This means that any commitments for UK financial institutions will now commence as of 30 June 2014. Only accounts in existence on or after this date will be subject to reporting and 2014 will be the first year that reporting covers.
Implementing the UK’s Agreements with the Crown Dependencies to Improve International Tax Compliance (PDF 219K)
On the 12 December 2013 the government published a response to this discussion document along with draft regulations.
Summary of responses: Implementing the UK’s Agreements with the CDs and Gibraltar to Improve International Tax Compliance (PDF75K )

Automatic exchange of information agreements

On 9 April 2013 the government – along with France, Germany, Italy and Spain – also announced an agreement to develop and pilot multilateral tax information exchange based on the Model Intergovernmental Agreement to Improve International Tax Compliance and to Implement FATCA.
A joint letter was issued to the European Commission setting out the terms of the agreement.
Read the 9 April announcement on the GOV.UK website (Opens new window)
Following this announcement the Crown Dependencies and the British Overseas Territories have announced their commitment to engage in this pilot for multilateral exchange. You can read about the first announcement made on 2 May 2013, from the link below.
Find the 2 May announcement on the GOV.UK website (Opens new window)

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Real Time Information: Filing and paying HMRC

This is a further reminder to employers about the PAYE filing and payment position for employers reporting PAYE in real time.

Payment dates and paying in full

Due dates for payment remain unchanged.
HM Revenue & Customs (HMRC) should receive:
  • cheque payments by the 19th of the month following the end of the tax month or quarter to which it relates
  • cleared electronic payments by the 22nd
HMRC expects employers to pay in full by the due date.
Further guidance, including how to calculate the amount to pay can be found in HMRC’s guide ‘PAYE/National Insurance payments and deadlines’.
PAYE/National Insurance payments and deadlines

Paying HMRC

Reporting PAYE in real time will tell HMRC how much you should pay each month. If you report amounts that exceed the quarterly payment limit HMRC will notify you and expect you to pay monthly in the future.
It is important you pay using the right payslip or, if paying electronically, you use the right reference number. This will avoid unnecessary contact and/or reminders for payments already made.
You can find full guidance on paying and using the right reference number in ‘How to pay PAYE/Class 1 National Insurance contributions/CIS’.
How to pay PAYE/Class 1 National Insurance contributions/CIS
You can check that your HMRC reference number is in the right format before making a payment to HMRC in ‘Reference checkers’.
Reference checkers

Correcting errors

For this month any amended or correction FPS and Employer Payment Summary (EPS) received after 19 January 2014, ie received late, will be taken into account in calculating your payment for February or the next quarter. You should therefore pay the amount in full from the FPS/EPS returns you submitted on or before 19 January 2014.
You can find further guidance in ‘Correcting payroll errors – current year’.
Correcting payroll errors – current year

If you have no FPS to send

You should use an EPS to tell HMRC that you have no FPS to send. Without it, HMRC will calculate what they believe is due – and expect you to pay it in full. Further guidance is included in HMRC’s guide ‘What happens if you don’t report payroll information on time’.

What happens if you don’t report payroll information on time

PAYE if your business changes

There are a number of potential changes to your business that have implications for your operation of PAYE.
HMRC’s guide ‘PAYE if your business closes or changes’ sets out what you must do in some of the most common cases such as ceasing to employ anyone, closing or merging your business or selling the business on to someone else.
PAYE if your business closes or changes

Checking your 2013-14 PAYE position

You can use HMRC’s online Business Tax Dashboard to confirm the real time submissions that HMRC has received and to see both what you owe and what you have paid.
When the ‘Amount due in period’ is updated depends on when an FPS/EPS is received. You can check the dates the dashboard is updated in HMRC’s guide ‘Using HMRC’s Business Tax Dashboard as an employer’.
Using HMRC’s Business Tax Dashboard as an employer

What if I don’t send any PAYE reports in real time?

If you don’t submit your FPS or a nil EPS on time, HMRC may raise an estimated charge – referred to as a ‘specified charge’.
A specified charge is HMRC’s calculation of what you owe based on your previous PAYE filing and payment history. HMRC will raise a specified charge for each tax month that you fail to send a real time FPS or nil EPS.
Further guidance is included in HMRC’s guidance ‘Specified Charges’.
Specified Charges
HMRC has introduced a series of new electronic messages to help employers keep their PAYE up to date. Further information can be found in HMRC’s What’s New messages of 21 October 2013, and 10 and 18 December 2013.
Helping employers keep up to date with their PAYE
A new electronic message to help employers keep up to date with their PAYE
Another electronic message to help employers keep up to date with their PAYE

Final 2013-14 PAYE report

It is important to keep your 2013-14 PAYE up to date. Penalties may apply if you don’t submit your final PAYE report for 2013-14 on time. There is more information in HMRC’s guide ‘PAYE final submission for the year and end-of-year tasks’.
PAYE final submission for the year and end-of-year tasks

More help

For a quick overview, HMRC has produced a leaflet ‘Reporting and paying HMRC in real time: getting it right’.
Download ‘Reporting and paying HMRC in real time: getting it right’ (PDF 43K)
You can find full guidance on paying on the HMRC website – follow the link below.
Paying HMRC
For full guidance on reporting PAYE in real time see ‘Operating PAYE in real time (RTI)’.
Operating PAYE in real time

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PAYE real time submissions: changes to reports you send HMRC from April 2014

HM Revenue & Customs (HMRC) has recently made some updates to guidance for employers on reporting PAYE information in real time. These updates are intended to forewarn employers about changes they’ll see on payroll submissions from April 2014, new entries they’ll make in their payroll records and other new information to help employers meet their obligations.
The updates include:
  • a ‘Late reporting reason’ that can be entered on a Full Payment Submission (FPS) that’s late
  • being able to make your first 2014-15 PAYE submission any time after 6 March 2014
  • providing bank account details on an Employer Payment Summary (EPS) to get quicker repayments
  • new fields on an Earlier Year Update (EYU) you’re completing for 2013-14
  • a new online appeals facility being introduced in 2014-15
  • more about what counts as a reasonable excuse if you don’t report on time
  • updated guidance for employers exempt from filing or unable to file online
Find all this guidance in Operating PAYE in Real Time (RTI)

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New rules for some Gambling Duties from 1 December 2014

From 1 December 2014, HM Revenue & Customs (HMRC) is changing the rules for Remote Gaming Duty (RGD), General Betting Duty (GBD) and Pool Betting Duty (PBD).
  • RGD applies to remote gambling, for example casinos and bingo played through the internet
  • GBD covers more general betting such as fixed-odds betting and pool bets on horse and dog racing
  • PBD applies to pool betting (other than on horse and dog racing) and non fixed-odds betting
This guide gives a brief overview of the key changes and what you will need to do if the changes affect your business.
Premises based betting and the treatment of spread betting will be unaffected except for some administrative changes.
The new rules don’t start until 1 December 2014, although you may need to carry out some preparation before then.
HMRC will publish full guidance on all aspects of the changes before the rules begin.
You can access the first in a series of Gambling Tax Reform information notes at the end of this article.
The new rules will affect:
  • The remote gambling industry who offer remote betting and gaming to UK consumers from outside the UK
  • UK land based betting business such as high street betting shops
Land based gaming sector businesses such as casinos and bingo halls will not be affected by these new rules unless they offer remote betting or gaming.

Getting ready for the changes

If you are a gambling operator you are advised to make sure that everyone in your organisation who needs to know about the changes is kept informed and in-house systems and procedures are reviewed accordingly.

New Gambling Tax (GT) online service for RGD, GBD and PBD

To support you with the changes, HMRC is introducing a new online service.
You, your agent or other representatives will be able to use the GT online service to:
  • Register your business or group for RGD, GBD and PBD
  • Make changes to your registration details – for example your contact address
  • Deregister
  • Submit returns and payments

The current tax rules for RGD, GBD and PBD

Under the current tax rules, gambling activities are taxed on a ‘place of supply’ basis. This means that if you are supplying gaming from the UK, you pay tax on all of your gross gambling profits, while operators supplying UK customers from outside the UK pay no UK gambling taxes.
There will be no change to the way that GBD is calculated on spread betting receipts, although quarterly rather than monthly returns will be required.  However, spread betting operators will be able to use the GT online Service.

New tax rules for RGD, GBD and PBD from 1 December 2014

HMRC is changing the basis of how these duties are taxed from ‘place of supply’ to ‘place of consumption’. This means that you will become liable to one or more tax (RGD, GBD or PBD), if you offer remote gambling to a person who usually lives in the UK. This applies no matter where in the world you are based, as long as the gambling can be accessed from the UK.
If you supply remote gambling to UK customers from outside the UK you will become liable to a UK gambling tax for the first time and RGD, GBD, or PBD will become payable. UK based operators who supply remote gambling to customers who do not usually live in the UK will no longer be liable to RGD, GBD or PBD on those transactions.
If you hold a Remote Operating Licence (ROL) from the Gambling Commission (GC) you must register for the appropriate tax and submit returns online.
Any gambling operators who offer remote gambling to UK customers will have to build verification checks into their customer handling processes if the customer gives an address outside the UK.
Pool bets on horse or dog racing are currently charged with GBD. This won’t change, but the method of calculating pool betting profits for duty purposes will be amended to exclude non-UK customers from the calculation where it is appropriate to do so.
There will also be some changes to the accounting periods for GBD and PBD returns. The accounting periods will change from monthly to quarterly. This is in line with RGD returns.

What we mean by a UK customer for remote gambling taxation purposes

For the purposes of remote gambling the definition of a UK person is someone who usually lives in the UK.

Customer verification checks

You should obtain a declaration from each gambler which shows the address at which the gambler usually lives before accepting bets.  If no declaration is received the customer will be determined as being a UK person.
You should also carry out verification checks on the information provided if a customer gives an address outside the UK.
These procedures must be built into any customer handling processes.
More information about UK customers and verification checks can be found in the Gambling Tax Regime 2014 information note.

What to do if you become liable to gambling duty from 1 December 2014

If you become liable to one or more of the gambling duties (RGD, GBD, or PBD) under the new rules, you must register for the appropriate duty, submit returns and pay any tax due in sterling.
If you will be required to hold a ROL from the GC, you must register and submit returns online. If you don’t have to operate under a ROL you can register and submit returns on paper, however HMRC recommends that you use the online service.

When and how to register under the new rules

If you will become liable to one of the gambling duties you must register by 1 December 2014. The GT online service for registration will open in early autumn 2014, giving you plenty of time to register before the 1 December 2014 deadline.
HMRC will publish guidance on how to register before September 2014.

Existing operators who have notified /registered under the current rules

If you are already a gambling operator and have notified HMRC of a GBD liability or have an HMRC pool betting permit or you have already registered for RGD you will not have to register under the new arrangements.
HMRC will automatically transfer your existing notification/registration to the GT online service. HMRC may need additional information about your business to carry out the registration process and if more information is required you will be contacted during summer 2014.

Remote gambling operators outside the EU

You may be required to appoint fiscal and administrative representatives if you are a remote gambling operator based in a country outside the EU and:
  • The UK does not have an appropriate debt collection and assistance agreement with the country
  • You are not part of a group registration with a UK-based operator
Any fiscal and administrative representatives will need to be established in the UK and to be agreed by HMRC. HMRC will publish further guidance about this before the new rules begin.

Betting operators liable to GBD and PBD – changes to accounting periods

If your betting business is currently liable to GBD and PBD (mainly those with betting shops), under the new rules you will have to submit your returns and payments quarterly rather than monthly. Quarterly accounting periods already apply to RGD.
Gaming Duty (casinos) and Bingo Duty (land based bingo) will be unaffected.
Transitional arrangements will be put in place for existing operators to switch from monthly to quarterly returns. Further details will be published before the new rules are introduced.

Returns and payments for RGD, GBD and PBD

If you are registered for RGD, GBD or PBD you will need to submit four returns each year. Returns and payments (in sterling) are due by the 30th day following the end of the accounting period.
If you are required to hold a ROL or if you register online through the GT Online Service you must submit returns online.
If you do not have to operate under a ROL and decide to submit returns on paper, HMRC will send you a paper return to complete at the end of each accounting period.

Using the GT online service to submit returns

If you haven’t already signed up for HMRC Online Services (for other taxes) you will be automatically enrolled to use our online service following the online registration process. This will allow you to submit your return online.
If you’ve already signed up to use HMRC Online Services you just need to add the GT online service to your existing services to submit your return online.
HMRC will publish guidance covering all aspects of the GT online service before the new rules start.

Making returns and payments

Returns and payments are due by the 30th day following the end of the accounting period.
If the end of your accounting period falls on a weekend or bank holiday both your return and payment must reach HMRC by the previous working day.
HMRC recommend that you pay electronically.
  • Bacs Direct Credit
  • Faster Payments by online or telephone banking
  • CHAPS
Payments from outside the UK can be made by transferring funds electronically from an overseas bank through the SWIFT banking system. This will involve holding an International Bank Account Number (IBAN) and a SWIFT Bank Identifier Code.
More information about paying HMRC

Enforcement of the new rules

The new rules will be supported by enforcement measures, including, unlimited fines or the loss of a ROL issued by the GC.

Further information

More detailed information can be found by following the link below to an information note about the changes.
Gambling Tax Reform 2014 (Opens new window) (PDF 75K)

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Toolkits to help reduce errors

These tool kits provide guidance on areas of error that HM Revenue & Customs (HMRC) frequently see in returns and set out the steps that you can take to reduce those errors. They should help you to:
  • ensure that returns are completed correctly, minimising errors
  • focus on the areas of possible error that HMRC consider key
  • demonstrate reasonable care
Before you get started, please read the essential information on using the tool kits and reasonable care under HMRC’s penalty system.
Essential information to help you use HMRC’s tool kits
HMRC has also produced a short video that gives useful information about the tool kits (running time 3 minutes).
View the ‘HMRC agent tool kits’ video (Opens new window)
Download a transcript of the ‘HMRC agent toolkits’ video (PDF 46K)
The tool kits are available for download only. To view them, you need to use a PDF file viewer such as Adobe Reader which is available to download free of charge from the Adobe website.

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A new electronic message to help employers keep up to date with their PAYE

HMRC is introducing another new message to help employers keep their PAYE up to date.
This electronic message tells the employer that they haven’t sent one or more of the Full Payment Submissions (FPS) that were expected for the last month. It reminds the employer that they must send an FPS each time they pay their employees.
HMRC will start to issue these messages gradually so they can monitor and review the message service to ensure it is as efficient and thorough as possible.

Non-filing message exceptions

There are two instances where an employer may receive a non-filing message although they have filed on time.
These are:
  • when an FPS has been sent in advance for this tax year – for example, a sole director/employee planning to take the same earnings each month may have submitted 12 FPS in April for the full year
  • where HMRC has received an Employer Payment Summary (EPS) before 14 October 2013 that reports a ‘period of inactivity’ – for example, if an employer has sent an EPS in August 2013 to report a period of inactivity from September 2013 to February 2014
In either instance, if an employer receives a non-filing message they do not need to take any further action.
Employers will not necessarily receive a message in every instance of late filing or failure to file. There is therefore no need for employers to contact HMRC if they think they should have received a message but have not done so.

2013-14

Although there are no in-year penalties for late filing and/or payment for the current tax year, employers are reminded that they are liable to penalties after the end of the tax year:
  • if they do not report the final payments made to an employee or pension recipient by 19 May following the end of the tax year
  • for failure to pay on time (Schedule 56 Finance Act 2009)
Please see HMRC’s guidance on ‘What happens if you don’t report payroll information on time’.
What happens if you don’t report payroll information on time

More information on the new electronic messages

All of the electronic messages are aimed at helping employers bring their PAYE up to date and will remind employers that:
  • from April 2014, if they don’t pay or report on time, they may incur penalties in-year rather than incurring them after the end of the year as now
  • if they had no PAYE payment to make because they did not pay any employees during a particular period, they should let HMRC know by sending an Employer Payment Summary (EPS)
There’s full information on how to view these electronic messages in the What’s New message published on 21 October 2013.
Helping employers keep up to date with their PAYE

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New Regulations and Technical Note on the changes to the tax rules for Unauthorised Unit Trusts

The Unauthorised Unit Trusts (Tax) Regulations 2013 (Statutory Instrument number 2013/2819) have been made, following the end of the consultation process. These regulations set out the new tax rules for Unauthorised Unit Trusts and their investors.
HM Revenue & Customs (HMRC) published draft guidance on 11 December 2012 to help customers understand how the new rules would work. That guidance will be updated to take account of customers’ questions and minor changes to the regulations since they were published in draft form. But in the meantime, HMRC has published a Technical Note to summarise the changes and set out what trustees, managers and agents need to be aware of and act on now.
Read the regulations on the Legislation.gov.uk website (Opens new window)
Download the technical note (PDF 42K)
Download the draft guidance (PDF 105K)

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Dispatch of 2013-14 Payment Booklets

Further to the ‘what’s new’ message issued on the 5 December 2013 we are pleased to advise you that we have obtained an extension on the period of time that the 2013 to 2014 booklets will be issued before we have to take the suspending action.
Dispatch of the 2014 to 2015 Booklets will now be starting on the 6 January 2014. So dispatch of the 2013 to 2014 Booklets will now continue until then.
This means that:
  • Where a request is received between 3 January 2014 and 24 January 2014 we will issue the booklet in the week commencing 27 January 2014.
The guidance given in the previous message will still apply for payment due on 19 January 2014.

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PAYE Real Time Information: package of help announced for micro employers

Existing employers with nine or fewer employees who need more time to adapt will be able to report PAYE information on or before the last pay day in the tax month until April 2016.
More than 99 per cent of PAYE records are now successfully being reported in real time. Almost 93 per cent of active employers are now using the new processes to send PAYE information about their employees.
The vast majority of employers are finding reporting in real time straightforward, however HM Revenue & Customs (HMRC) recognises that a small proportion of micro employers and their agents still need more time to adapt.
HMRC has therefore agreed that existing micro employers (and, where appropriate, their agents) who need more time will have up to two years to adapt their processes to ensure they are ready to report all payments in real time before April 2016.
All employers will be required to report PAYE each time they pay their employees by April 2016 (unless an exception applies – for example, in some limited circumstances employers have a week to report payments to casual workers). HMRC will be encouraging micro businesses to adapt their processes sooner to ensure that they are ready to report all payments each time they pay their employees by April 2016.
This is narrower than the current relaxation (see the link at the end of this page) which comes to an end in April 2014. The new relaxation will only apply to existing employers with nine or fewer employees.
All employers starting to operate PAYE after 6 April 2014, as well as existing employers with 10 or more employees, will need to report each time they pay their employees from April 2014. HMRC wants to encourage new employers to start off on the right foot and help them avoid the need to change their reporting processes at a later date.
All employers, regardless of size, who are already using payroll software products or HMRC’s Basic PAYE Tools to report PAYE on or before the date they pay their employees should continue to do so.
Payroll software developers will not be required to change the way their products work, although some minor changes to text may be needed to allow employers to tell us that they are using the relaxation. We appreciate this is late notice for them, and have worked closely with representatives from the industry on this change.
This decision forms part of a package, developed with employers, agents, payroll software providers, representative bodies and the Department for Work and Pensions (DWP), to help micro employers as they move towards full reporting of PAYE information in real time.
The package also includes:
  • improved guidance, including best practice scenarios – see the link ‘Situations where employers will not have to report PAYE information ‘on or before’ the time they pay their employee’ at the end of this page
  • ongoing work with the software industry to harness technology to develop new ways to report PAYE information on or before the date they pay their employees – for example, by exploring use of mobile apps
Universal Credit and PAYE in real time
HMRC has worked closely with the DWP in developing this package to ensure that it balances the needs of Universal Credit claimants and micro employers.
Reporting PAYE information in real time is vital to ensure that all employees claiming Universal Credit receive what they are entitled to. It is therefore important that micro employers make best use of this time, so that they are reporting on or before the date they pay their employees by April 2016 and before Universal Credit is fully rolled out.
Consultation
This support package was developed following analysis of the recent RTI survey, independent customer research, a programme of visits to employers and agents and wider feedback. It was developed in consultation with employers, agents, payroll software providers and representative bodies.
Full report
Read the full report ‘Assessment of impact of ‘on or before’ reporting’ on the GOV.UK website.
Assessment of impact of ‘on or before’ reporting (Opens new window)
Help to report PAYE in real time (on or before)
Employers, agents and payroll providers can find more information on how to start reporting PAYE on or before the date they pay their employees by following the link below.
Operating PAYE in real time (RTI)
Our best practice guide will tell you when you don’t need to report ‘on or before’ but also provides some scenarios which have helped other employers or agents to start reporting ‘on or before’

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Revenue & Customs Brief 36/13

VAT: Reverse charge accounting for businesses trading in mobile telephones, computer chips and emissions allowances: continuation of current treatment.
Who needs to read this?
Businesses buying and / or selling any of the following:
  • mobile telephones
  • integrated circuit devices, such as microprocessors and central processing units, in a state prior to integration into end user products
  • emissions allowances, emissions reduction units and emissions reduction certificates
Further to EU Directive 2013/43/EU introducing the Reverse Charge Mechanism, HMRC can confirm that the UK will continue to apply the reverse charge for mobile telephones, computer chips and emissions allowances in their current forms. The Reverse Charge Mechanism allows these measures to run until the end of 2018.
Background
The reverse charge for mobile phones and computer chips was implemented in the UK with effect from 1 June 2007 to remove the opportunity for fraudsters to use these goods to perpetrate missing trader intra-community (MTIC) carousel fraud. As an exception to the normal accounting rules for VAT, the UK secured agreement to derogate from EU law to apply this anti-fraud measure, which originally ran until 30 April 2009. The derogation was then renewed in 2009 and again in 2011.
A zero rate for emissions allowances was introduced on 31 July 2009 as an interim measure to halt rapidly escalating MTIC fraud in this area, pending agreement on a common EU-wide countermeasure. A Directive providing an option for all Member States to introduce a reverse charge was adopted in March 2010 and the UK’s reverse charge for emission allowances was implemented with effect from 1 November 2010.
The EU legal base for the reverse charge for mobile telephones and chips has now been superseded by the Reverse Charge Mechanism. The Directive also has the effect of extending the period of validity of the reverse charge for carbon credits from 30 June 2015 to the end of 2018. However, no changes are required to UK law which will continue to apply in its current form.
The Reverse Charge Mechanism allows Member States the option to introduce a reverse charge without a derogation for other goods and services subject to MTIC fraud; these are: gas, electricity, games consoles, tablet PCs, laptops, industrial crops and raw and semi-finished metals.
Further Information
For further information on the reverse charge please see Public Notice 735: VAT reverse charge on specified goods and services.
Issued 9 December 2013

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Dispatch of 2013 to 2014 Payment Booklets

We will be issuing new PAYE Payment booklets for the year 2014 to 2015 between 14 December 2013 and 31 March 2014. Please put the booklet somewhere safe until you need to use it from April 2014.
  • Due to the issue of these booklets we temporarily cannot issue PAYE Payment Booklets for the tax year 2013 to 2014. This will affect customers who request a 2013 to 2014 booklet between the following dates:booklets will be issued normally for requests made from 20 January 2014
    • Where a request is received between 14 December 2014 and 17 January 2014 we will issue the booklet by 27 January 2014
  • Booklets will be issued normally for requests made from 20 January 2014
Customers who have a payment to make by 19 December 2013 and/or 19 January 2014 who do not have a payslip (or payment booklet) should use the online facilities to make payment. Please make sure the cleared funds reach us by no later than 22 December 2013 or 22 January 2014. We recommend that payment is made online as this is the safest, quickest and most secure method. You can also tell us online that no payment is due; again you do not need a payslip.
Further information on how to pay, including the use of Faster Payment service, and to let us know that no payment is due can be found on the HMRC website at:
How to pay PAYE/Class 1 National Insurance contributions/CIS.
We may charge late payment penalties if payment is not received in full and on time. The suspension of booklets and the delay/absence of a payslip do not remove the responsibility to ensure your payment is made in full and on time.
If you do not want to wait for us to send you the payslips please send your payment to HMRC Shipley together with a letter including your:
  • Company/Employer Name
  • Address
  • Telephone Number
  • Accounts Office Reference Number
  • The month, Deduction year and amount being paid
Or you can complete and print off a PAYE payment slip from the HMRC website at:
PAYE/Class 1 National Insurance contributions payment slip
This payment slip cannot be used to make payment at a bank by bank giro or at the Post Office.

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International agreements to improve tax compliance

The Foreign Account Tax Compliance Act (FATCA), which is part of the US Hiring Incentives to Restore Employment Act of 2010, aims to combat tax evasion by US tax residents using foreign accounts. It includes certain provisions on withholding taxes and requires financial institutions outside the US to pass information about their US customers to the US tax authorities, the Internal Revenue Services (IRS). Failure to meet these new reporting obligations would result in a 30% withholding tax on the financial institutions.

Draft US regulations setting out the implementation details were published in February 2012.

The FATCA provisions impose new and substantial burdens on UK businesses in identifying US taxpayers, and registering and reporting information to the IRS. Significantly for UK institutions the Data Protection Act precludes UK businesses from passing the required information to the US.

The UK-US Agreement

The government (along with France, Germany, Italy, and Spain) and with the support of the European Commission took part in joint discussions with the US government to explore an intergovernmental approach to FATCA, supporting the overall aim to combat tax evasion, while reducing risks and burdens on financial institutions. A model intergovernmental agreement (IGA) was developed and published in July 2012.

The UK and the US subsequently signed an IGA – the ‘UK-US Agreement to Improve International Tax Compliance and to Implement FATCA’ – in September 2012 (see the ‘Current documents’ section below).

The IGA reduces some of the administrative burden of complying with the US regulations, and provides a mechanism for UK financial institutions to comply with their obligations without breaching the data protection laws. Under the IGA, financial institutions pass information to HM Revenue & Customs (HMRC) who will then automatically exchange this information with the IRS.

The IGA has changed since it was signed, in that Annex II has been updated by a mutual agreement entered into between the competent authorities of the UK and the US. The changes result in a wider scope of institutions and products effectively exempt from the FATCA requirements, and provide greater clarity on the categories of institutions which will be non-reporting UK financial institutions that are treated as deemed-compliant under the IGA.

Annex II of the IGA was amended by an Exchange of Notes between the two governments dated 3 June and 7 June 2013 (see the ‘Current documents’ section below).

On 12 July 2013 the US announced a delay of 6 months before the commencement of FATCA. The effect of this delay is that there will be no reporting with regard to 2013, and all current deadlines for undertaking due diligence etc will be pushed back by 6 months.

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